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Why Are Bicycles So Frickin’ Expensive?

All that money for two wheels, some pedals and a bunch of gears?

If you’re in the market for a new bicycle, well, I hope you saved up! Shopping at a legitimate bicycle shop, you’ll quickly notice that these seemingly simple machines aren’t cheap. All that money for a bicycle? What the hell? Why are bikes so expensive these days? Alongside Andrew Deceuster, an associate professor at Utah State University’s Applied Sciences, Technology and Education Department, who’s designed bicycles and worked with bike brands in testing equipment, we’re riding down some answers.

Why are bikes so expensive, then? Wait, no, first off, is there really much difference between a bike at a bike shop and a bike at Walmart?

Yes, Deceuster says — the bike at Walmart may look like any other bike, but it’s different than one at a real bike shop in more ways than just the low, low price.

Bike shops have different levels of bikes, but their “entry level” bike is priced a lot differently than one at Walmart. The thing with Walmart bikes, Deceuster says, is that they’re designed to hit a very certain price point for the buyer who just wants, say, a $200 bike — no matter the quality. And in order to do this, its parts must be made as cheaply as possible.

What does that mean? It means pieces of the derailleur, for example, will be injection molded instead of made out of metal. Key components are steel rather than aluminum, or even plastic instead of metal. “Most everything on the bike is whatever Walmart can do to hit that cheaper price point to try to get somebody not to go to the bike shop,” Deceuster says.

Are more expensive bikes worth it?

Well, when it comes to the cheaper ones, don’t be misled by the brands you might see: Those “Schwinn” or “Mongoose” bikes for sale at Walmart are name brands in name only — both brands went bankrupt years ago, and were bought by a Canadian conglomerate whose bikes come from China. Deceuster has personal experience in buying cheap bikes for his children, and he says they break easily: Little things like chains break, or derailleurs snap. When his kids pop the tires by sliding out too often on them and it’s time to spend money on replacement parts, Deceuster quickly finds that the cost of these simple repairs is nearly the same as just replacing the bike with another cheap new one, which is what many people end up doing. Treating — and pricing — bikes as disposable objects is a very unsustainable way to look at them.

So quality is better on the bikes at bike shops?

Yes. They’re just higher quality overall: The components are name-brand; the paint job is better, in order to prevent rust; it’s welded correctly; parts are forged rather than made with injection molding. Factory tolerances are far higher, too. Deceuster says ball bearings on a bike-shop bike will be properly round, rather than, say, oblong. Overall, they’re designed to last far longer — to be maintained, rather than replaced.

Where are the good bikes made, if not in China?

Some brands still build in the U.S., but Taiwan is pretty much the world bike capital, and has been for decades. Lots of fine bike companies, like Specialized, each have many factories over there.

What about online-direct bikes?

That’s an interesting trend. Many of these mid level-priced bikes come from China, and they actually have decent components on them. Anecdotally, the ones Deceuster has purchased are okay — the frame geometry (which translates to how comfortable a bicycle is) isn’t always great, which indicates a lack of product testing below what you’d find from a respected bike brand.

So why are bikes so expensive in bike shops nowadays? What’s really changed over the years?

Let’s talk about a bike for sale in 2020 versus, say, a bike for sale in 1995. Deceuster says the technology is a lot different. For one thing, there’s a lot more of it! Dual suspension is found in many bikes now (and suspension technology has gone through many iterations, each of which has become increasingly costly). Whereas there used to be a standard fork that went on most models of a brand’s bikes, nowadays most models will have their own fork. But of course it took lots of testing to figure out which components fit best together for each model, and that’s costly to do.

It’s also important to mention that bikes overall are more labor-intensive than you might think, Deceuster says. Most frames are still hand welded, which leaves those ripple marks you’ll see where the parts join. And labor costs are always going up. Another factor that affects the price of most everything these days — tariffs.

Aside from the geopolitics, all of this means you’re now getting a much better bike that’s designed to last. Unfortunately, it’s an increasingly costly product.

What are the most expensive parts of a bike, then?

Depending on the frame material it’s the frame, the fork and the wheel set. At the really high end of cycling, wheel sets alone can cost thousands! 

Yeah, what’s with those ultra-expensive bikes? Do they have to cost tens of thousands of dollars?

There are some interesting but valid economic reasons that top-end road or triathlon bikes cost more than a car. For one thing, bike companies produce relatively few of them, so there are really no economies of scale. The materials are often expensive, and the latest top-end bikes usually boast bleeding-edge technology and innovation, which is always expensive. Lastly, there’s a market for it: Competitive cycling and triathlon is somewhat of a rich-person’s pursuit, and the wealthy demographic that buys the most amazing new bikes generally doesn’t balk at paying obscene money — or at least not enough to discourage them from paying.

Are bike shops to blame for the cost of bicycles?

Hardly! In fact, in a way, bike shops only sell bicycles grudgingly. That’s because they don’t make much money off them. After the manufacturer and then the distributor each mark up the bike, the bike shop’s own margin is usually 30 to 40 percent. But that doesn’t count the labor cost of building the bike, which can take a couple hours, and then the floor space it’s taking up until it sells.

I’m sorry… bike shops don’t want to sell bikes?

Not so much! Bike shops make far more profit on accessories and maintenance. The bikes are, in a way, there to get people in the door, or a way to sell helmets, locks, lights, pumps, Camelbaks, future maintenance and whatever else once the customer buys a bike. They almost function as a loss leader, Deceuster says.

So are bikes going to remain expensive in the future?

Probably — Deceuster compares them to modern cars. Whether it’s because car buyers are actually demanding more features and technology, or a brand’s market research team determines that their car will sell better if it has a bunch of bells and whistles, companies are stuffing their products with all kinds of tech and gadgets that people don’t necessarily need. So it goes with bikes — as they get nicer and more complicated, it follows that they get more expensive. 

The bright side? Additive manufacturing, also known as 3D printing, might come to the rescue. Deceuster says it costs a lot of money for a bike company to invest in the mass production of increasingly complicated bicycle frame geometries. Maybe, he says, they’ll just be printed in the future — or the molds will be — so that it’s not as labor-intensive. This sort of thing might start with the ultra-high-end bikes, then filter down. “That’s where we can really start to see the price drops, once manufacturing can produce this technology at a much cheaper rate,” Deceuster says.

Until then, though, if you wanna pedal, best to start saving your pennies.

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